Highbridge, a $21 billion hedge fund firm that's part of J.P. Morgan Asset Management, is buying a “majority interest” in Gávea, a $6 billion firm run by Arminio Fraga, former president of the Central Bank of Brazil who used to manage money for billionaire George Soros.

A purchase price wasn’t disclosed.

“This has been a long courtship of one of the finest global macroeconomic hedge fund managers in the world,” said Mary Callahan Erdoes, CEO of J.P. Morgan Asset Management, in a statement.

“Gávea will provide Highbridge with greater macroeconomic insight and direct exposure to investing in Brazil, which will be a powerful addition to our investment capabilities,” noted Glenn Dubin, who heads Highbridge.

New York-based J.P. Morgan Chase
JPM, -1.12%
is looking for growth overseas, partly because of new financial regulation in the U.S. and a lackluster domestic economy. In contrast, Brazil’s economy is booming as the country benefits from high commodity prices.

Gávea runs hedge funds as well as private-equity funds and makes other longer-term investments, using a macroeconomic, research-intensive process.

“While our emerging market investment strategies can enhance Highbridge’s global platform, we will benefit from their successful track record of building businesses like ours,” Fraga said.

J.P. Morgan said the addition of Gávea will work in a similar way to when the bank bought Highbridge in 2004.

Gávea’s investment process won’t change and its day-to-day activities will still be managed by its executive team. This includes Arminio Fraga; Luiz Fraga, co-founder and co-chief investment officer of private equity; Gabriel Srour, co-CIO of hedge funds; Chris Meyn, head portfolio manager of private equity, and CEO Amaury Bier, a former deputy finance minister of Brazil.

Arminio and Luiz Fraga will join Highbridge’s board of managers and Executive Committee, and Arminio Fraga will join the Highbridge investment committee.

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